2011 (2) TMI 864

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..... w-cause notice upheld the demand without going into the limitation aspect - However, taking the facts and circumstances of the case, which involved receipt of portion of the processing fee by the respondent from the bank and the bank having paid the service tax on the entire amount he waived penalties imposed by the original authority under various Sections - Decided in favour of assessee.
Hon'ble Mr. M.VEERAIYAN, Technical Member Shri K.Balasubramanian, DR For the Appellant This is an appeal by the department against the order of the Commissioner (Appeals) No.235/2010 dt. 24.6.2010. 2. Heard the learned DR. None appears for the respondent in spite of notice. 3. The respondent functions as loan processor between ICICI bank, Home Fin .....

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..... eived by them was out of the fee collected for processing of the loan by the bank. They were under the impression that since service tax was payable on the whole amount of processing fee by the Bank, no service tax was liable to be paid by them. However, on being pointed out by the department, they have promptly paid the service tax along with interest before issue of show-cause notice. The submission of ld. DR that the Commissioner (Appeals) has upheld the demand which was confirmed invoking the extended period, though is factually correct, no submissions have been made on behalf of the respondent before the Commissioner (Appeals) about the applicability or otherwise of the extended period of limitation. The Commissioner (Appeals) taking n .....

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..... have readily paid the service tax along with part payment of interest for belated payment and the same has been appropriated towards the demand and interest confirmed. It is seen that the above said error in understanding the provisions relating to impugned taxable services is a reasonable cause for failure of provisions contained under Section 76, 77 and 78 of the Act." 5.3 There is no evidence adduced to contend that the respondents have deliberately failed to pay service tax. There is no evidence brought on record to contradict the above factual finding recorded by the Commissioner (Appeals). 6. In view of the above, there is no merit in the appeal by the department and the same is rejected. (Dictated and pronounced in open court)

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